In gambling, New York State holds the trump card

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Here's a bit of trivia: Which state government brings in more gambling revenue than any other?

a.) Nevada

b.) New Jersey

c.) New York

Need a hint? It's not home to Sin City or its East Coast counterpart, with their combined 268 casinos. It's our great State of New York, already so hooked on revenue from the state's billion-dollar lottery that it needs more.

Gov. Andrew Cuomo is pitching a state referendum later this year that would authorize at least three new casinos in upstate New York. Speculation has been in the works for months about where those casinos would be located, and Cuomo gave his first hints last week that Western New York might be out.

But there's a lesson here for any town hoping a casino will be a budget jackpot: Casino cash will come at the mercy of the whims of Albany.

You probably know, by now, the story of Niagara Falls and Salamanca, where the state's ongoing tiff with the Seneca Nation of Indians has dried up casino cash and blown holes in city budgets.

There's another tale here of a community – promised a portion of the profits under state law – that found out just how quickly that money can evaporate.

In Hamburg, where the raceway has been transformed by the Hamburg Casino at the Fairgrounds, the state's cut of revenues has risen from $18.9 million in 2009 to $27.1 million in 2012 as the gambling hall expanded. The money, like traditional lottery profits, is funneled to education.

What's happened to the annual payments Hamburg gets as host to the casino in that same time? It's less than half of what it was three years before – dropping from $1.24 million in 2009 to $577,000 last year.

That's Albany logic, where state legislators can simply change the law to cut what racetrack casino towns receive.

“Unfortunately, we have no say and no real recourse in the matter,” said Hamburg Supervisor Steven J. Walters. He hopes local legislators can get the law changed again to revive the old formula for payments.

But how can a town trust the state to deliver on casino promises when it simply rewrites the rules when it wants more cash?

Cuomo last week floated a proposal to split profits from new casinos. Ninety percent of the money would go to the state for education; 10 percent would go to local tax relief.

It's a careful calculation to sell the new casinos as a way to fund education. Schools need money, and the billions already poured into education doesn't seem enough to sustain rising costs such as pension payments and health care premiums gobbling school budgets.

But any community salivating over the opportunity to land a casino – and its slots revenue – ought to go into this with eyes wide open.

For those towns that think a casino will be a budget boon, recent history has left this lesson: Don't bet on it.